Why Your Business Needs to Expand the Number and Types of Payment Methods it Accepts

Ease of use and growing consumer demand are just two of the many reasons why your business needs to accept online payments. While many customers still prefer to complete their sale using a traditional credit or debit card issued by their bank, a growing number are turning to alternative peer-to-peer payment systems.

To compete, you must stay up-to-date and add to your list of accepted payment methods. Otherwise, you run the risk of losing business and allowing your payment mechanisms to hold you back from sustainable growth and progress. The following is a brief overview of some of the top alternative payment methods that are gaining acceptance at an increasing number of vendors.

Apple Pay

This payment method does not require physical contact to complete payment. Users store their bank account information and credit or debit cards in an online, digital wallet, that can then be accessed on many Apple compatible devices to complete payment transactions.

Within a physical store, users simply tap their device at the checkout scanner to pay. It also works with online websites and various apps. While it’s compatible with many iPhones, iPads, Apple Watch and Mac, less than 5% of retailers have the required technology to allow users to physically check out with Apple Pay within their stores.

Google Wallet

This payment is somewhat similar to Apple Pay, as it stores the user’s financial information within a digital wallet. Users must provide a U.S. issued debit card or bank account information from an account that originates in a U.S. location.

Once the account is set up, the holder can then send and receive money using either a desktop computer or mobile device, such as an Android smartphone. The transactions are processed without the user incurring any handling fees, which makes this an especially attractive option for micro-payments.

Bitcoin and Other Cryptocurrencies

Alternative currencies like Bitcoin are truly the wave of the future, as Genesis Mining recently completed the first Bitcoin transaction in space. This company allows users to acquire and invest their bitcoin in a number of ways.

Users can mine bitcoins by competing against others to solve complex puzzles and mathematical expressions that form the “proof-of-work” that helps to secure the payment system. While mining is time-consuming, it also produces encryption that is easy to verify. These steps help to protect the value of Bitcoin and other alternative, cryptocurrencies, as well as increase the stability of this virtual payment system.

Once purchased or mined, Bitcoin can be held as an investment like other currencies and commodities, like gold and silver. It can also be reinvested into additional mining operations or invested in other online businesses and ventures.

A growing number of retailers, governments and other entities all across the world are accepting Bitcoin as a secure, and anonymous way to send money online.

PayPal

This payment method shares some features of Apple Pay and Google Wallet in that users can connect their PayPal accounts to their banking accounts and credit or debit cards to fund their accounts. Unlike these two systems, this method also allows users from all over the world to send and receive their money in multiple currencies.

Users can even accept payment in one currency and easily exchange it into another for a small fee. This is especially helpful to world travelers and small to medium-sized businesses that have clients in multiple countries. Transaction fees vary, but as long as users use their PayPal balance, it’s usually free to send money to family and friends.

PayPal is accepted by many individuals and businesses all over the world for online payments. Upon request, the company will also issue a debit card that allows users to access their PayPal balances at ATMs and physical storefronts, much like a traditional credit or debit card. Some companies also sell prepaid debit cards that can then be linked to a PayPal account.

Amazon Pay

This online payment method allows users to pay for purchases at American owned websites by accessing the payment information that is stored in their own Amazon.com accounts. This method allows shoppers to pay merchants without having to give them their financial information since Amazon processes the payment and does not share the purchaser’s financial information to complete the transaction.

Payment Apps

A growing number of smartphone apps are making it easier to send and receive money. Two of the most popular are Venmo and iMessage. Like many other online payment methods, a debit or credit card, or bank account must be linked in order to send and receive payments through Venmo. With iMessage, users can send American dollars, UK Pounds, Bitcoin and Euros to anyone in the world via text message. iOS10 users can then transfer their payments to their bank account or a Bitcoin wallet, whereas Android iOS9 users cash out by following a url.

According to an article on payment methods published earlier this year in the Credit Union Times, 56% of all payments are now made online, and a growing number of those transactions are made via virtual, peer-to-peer payment methods. With trends like these it is clear that retailers and others must adapt, and move with the advances in technology and expand the methods of payment that they accept if they wish their business models to remain relevant, and viable long into the future.

This blog is for informational purposes only. Any advice given does not constitute a relationship and is by no means fact. The information and advice given on this site is only an opinion and should be confirmed with a finance or tax professional.